By Denise A. Valdez, Senior Reporter
PEPSI-COLA Products Philippines, Inc. (Pepsi-Cola Philippines) will be exiting the Philippine Stock Exchange (PSE) after its public ownership dropped below the minimum requirement.
The company told the exchange on Thursday its board of directors had approved the voluntary delisting of shares from the PSE main board due its inability to comply with the 10% minimum public float after a Korean conglomerate bought its shares in June.
Pepsi-Cola Philippines sold a 30.7% stake or 1,132,950,431 shares to Lotte Chilsung Beverage Co. Ltd. for P2.21 billion, which brought down its public float to 2.1%. Breaking the PSE’s 10% threshold for minimum public ownership is a ground for delisting.
“After due evaluation and study of the options available to the company, the board of directors approved and authorized the voluntary delisting of the company’s shares from the PSE,” the company said.
“Considering the level of its public ownership and the prevailing market conditions, it will not be able to comply with the minimum public ownership requirement by Dec. 18, 2020,” it added.
Lotte Chilsung will be doing another tender offer to buy 77,858,236 Pepsi-Cola Philippines shares owned by the public, excluding those currently held by Lotte Corp. and Quaker Global Investments B.V.
The new tender offer will be on Sep. 16. Lotte Chilsung is yet to file its tender offer report with regulators that would contain the conditions for the planned offer.
While the delisting of Pepsi-Cola Philippines may have minimal effect on market movement, some investors may dislike the company’s decision, and lose confidence in the bourse, Philstocks Financial, Inc. Research Associate Claire T. Alviar said.
“Long term investors of Pepsi could be disappointed by the decision of the management since it will be hard for them to liquidate, particularly if they choose not to participate in the anticipated tender offer,” she said in a text message.
“Some people may also lose confidence as the IPO (initial public offering) price of [Pepsi] back then was at P3.50, lower than its current price of P1.70, and there’s a possibility that the tender offer price would also be lower than the IPO price,” she added.
Shares in Pepsi-Cola Philippines stopped trading on June 17, when it closed at P1.70 apiece. Despite its delisting from the PSE, it will remain the exclusive bottler of PepsiCo’s beverage brands Pepsi, Mountain Dew, 7-Up, Mirinda, Mug, Gatorade, Tropicana, Sting and Aquafina in the Philippines.